If they're mobile property, they can count if they meet the safe harbor for mobile property. If they're physically located outside the zone, no dice.
Ask A Question
How can my machinery count as qualifying assets in my QOF if they are not located in the Opportunity Zone?
Answers
If your machinery is never located in an opportunity zone (OZ), then it cannot qualify as qualified opportunity zone business property (QOZBP). If it is mobile and, based on the number of days between two consecutive testing dates, at least 70% of the machinery’s use is within an OZ, then it can qualify as QOZBP. In addition, there is a safe harbor for property used by a business that meets the following requirements: (i) the property directly generates gross income for the business both inside and outside of the OZ; (ii) the business has an office or other facility within an OZ; (iii) the property is operated by employees of the business who (A) regularly use an OZ office of the business to carry out their duties and (B) are managed directly, actively, and substantially on a day-to-day basis by one or more employees of the business who carry out their duties at an office in the OZ; and (iv) the property is not operated entirely outside of an OZ for a period that is longer than 14 consecutive days to generate gross income. This safe harbor cannot be used to treat more than 20% of a business’ tangible property as QOZBP.
Basically, they can’t. A small portion of Opportunity Zone fund can be invested outside the OZ.
In order for property to be Qualified Opportunity Zone Business Property (QOZBP), it must be located in an Opportunity Zone and used in a trade or business in the OZ.
DISCLAIMER:the information found on this website is intended to be general information; it is not legal or financial advice. Specific legal or financial advice can only be given by a licensed professional with full knowledge of all the facts and circumstances of your particular situation. You should seek consultation with legal and financial experts prior to participating in any aspect relating to Opportunity Zones. Posting a question on this website does not create an attorney-client relationship. All questions you post will be available to the public; do not include confidential information in your question.